Real estate demand on the rise in China

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China’s urbanisation will continue to drive fundamental demand for homes and real estate.

Speaking on Wednesday at the World Cities Summit China In-Focus Forum in Singapore, CapitaLand’s CEO Lim Ming Yan estimated that there is demand for 35 million homes, based on the expectation that over 100 million people will be moving to the Chinese cities over the next few years.

Mr Lim said on average there is probably a need for five million homes a year over the next seven years, and there is still significant real demand for housing in major cities in China.

CapitaLand, which established its presence in China since 1994, has built 50,000 homes there with another 65,000 homes in the pipeline.

The Singapore-based developer also has a wide portfolio of properties on the Chinese mainland including shopping malls, commercial and mixed-used developments and serviced residences.

During his presentation, Mr Lim also outlined some demographic changes in China, such as the rising middle class and changing consumer aspirations, as well as the ageing population.

He noted that it is also “the end of cheap labour era” in China, and that some companies are shifting inland from coastal areas to keep costs down.

Looking at these trends, Mr Lim said there is opportunity for integrated development projects. However, he warned that the local government funding model could impact overall development.

Mr Lim said that the local government revenue is only enough to cover about 50 per cent of expenses, which means that the rest will have to be funded from other sources including land sales.

“The tendency when this happens is that the local government will tend to want to supply more land, the tendency to overbuild and oversupply land… Sometimes there may be a tendency to sacrifice some long-term benefits for short-term results, that’s an issue we have to deal with,” Mr Lim added.

However, Mr Lim said the central government is aware of this issue and he is confident that they will come up with solutions that will be good for the market, as well as China’s development and its people.

 

 

 

 

 

Source : Channel News Asia | June 5, 2014

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About thomasdinnocenzi

Thomas D'Innocenzi is a highly accomplished, results-focused senior international executive with extensive experience in global sourcing and market development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global sourcing operations worldwide. Extensive experience in international market development operations to accommodate rapid growth. Skilled in building top-performing teams, benchmarking performance, and restricting organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. As principal of Nova Advisors, LLC I’ve assembled an exemplary team that brings with them the knowledge and experience gained from starting up a Global Sourcing program with multiple Fortune 500 companies as well as the largest supplier network throughout the Asia-Pacific region. We have experience and expertise in more than a thousand medical and pharmaceutical products in manufacturing and sourcing at the best value. The right product, the right price point and the right branding fueled these successes that resulted in double-digit growth for top line sales and bottom line net margins for our customers. What sets us apart: • Our reach includes a large network of suppliers & manufacturers spanning 13 countries in Asia-Pacific region • We understand the manufacturing process and the business of the supplier and the buyer • Our company culture is based on quality assurance and our process is based on local quality control Our commitment is to be your partner offering the best products and services at the lowest cost. Contact me to discuss how we can make the global marketplace work for you. thomas@novaadvisors.com In addition, I am open to discussing opportunities in global sourcing, international marketing & sales, logistics and medical/pharma in Thailand, Vietnam, Malaysia, Philippines & Japan. Aside from my work I enjoy piano, astronomy, physics, and assisting my daughters with their studies. SPECIALTIES: Global Sourcing, Supply Chain Management, Business Development, Marketing, Logistics, Global Networking, Market Development, Healthcare Solutions, Pharmaceuticals, Medical Devices, Technology, Asia, Southeast Asia, US and Canada
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